Two major travel booking platforms reported Thursday that continuing tensions in the Middle East are creating significant challenges for their businesses, as the regional conflict extends into its third month.
Airbnb and Expedia both delivered first-quarter revenues that surpassed analyst predictions, yet their outlook for upcoming months reveals how geopolitical instability is causing widespread travel disruptions and booking cancellations.
Stock prices reflected investor concerns, with Expedia shares dropping 8% in after-hours trading following the company’s projection of second-quarter gross bookings falling short of Wall Street expectations. Airbnb shares declined approximately 1.5% as the company anticipated slower booking growth ahead.
The travel industry has faced mounting pressure since late February attacks involving the United States and Israel against Iran intensified regional hostilities. The escalating situation has forced airspace restrictions around key tourist destinations like Dubai and caused multiple airlines to halt service to affected areas.
While some airline operations have resumed and diplomatic efforts continue, international travelers remain hesitant due to ongoing concerns about potential conflict escalation.
Airbnb reported higher-than-normal cancellation rates spanning Europe, the Middle East, Africa, and Asia-Pacific regions. This places the company alongside industry competitors including Booking Holdings and Marriott, all citing war-related business disruptions.
The vacation rental platform noted that the conflict affected first-quarter booking nights in the Europe, Middle East and Africa region and anticipates continued challenges through the year’s second half.
Expedia experienced similar cancellation patterns across Europe and Asia, with Middle Eastern operations representing roughly 2% of total company revenue.
“The cancellations have subsided as we go into April, but certainly that was an impact,” CEO Ariane Gorin told Reuters in an interview.
Looking at specific projections, Airbnb estimates the ongoing conflict will reduce its second-quarter growth in nights and seats booked by about 1 percentage point. This metric tracks both accommodation bookings and additional services purchased through the platform.
Despite near-term headwinds, Airbnb increased its 2026 revenue growth projection to “low- to mid-teens” from the previous forecast of “at least low double-digits.” This optimism stems from robust travel demand and higher vacation rental pricing in North America and Latin America. Industry analysts predict average revenue growth of 12% for the period.
Domestic U.S. travel, comprising approximately 30% of Airbnb’s total room nights, shows early recovery signs. The market had experienced uneven performance, with budget and mid-range accommodations struggling while premium and luxury options maintained strength.
Seattle-headquartered Expedia projects second-quarter gross bookings between $32.5 billion and $33.1 billion. The forecast’s midpoint falls slightly below the $33 billion average analyst estimate compiled by LSEG.
However, Expedia’s first-quarter performance showed strength with gross bookings climbing nearly 13% year-over-year, powered by solid international travel demand. CEO Gorin noted that revenue growth outside the United States outpaced domestic performance during the quarter.
